STAG Industrial, Inc. (NYSE:STAG) Q2 2025 Earnings Call Transcript

STAG Industrial, Inc. (NYSE:STAG) Q2 2025 Earnings Call Transcript July 30, 2025

Operator: Ladies and gentlemen, greetings, and welcome to the STAG Industrial, Inc. Second Quarter 2025 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve Xiarhos, Vice President, Investor Relations. Please go ahead.

Steve Xiarhos: Thank you. Welcome to STAG Industrial’s conference call covering the second quarter 2025 results. In addition to the press release distributed yesterday, we have posted an unaudited quarterly supplemental information presentation on the company’s website at www.stagindustrial.com, under the Investor Relations section. On today’s call, the company’s prepared remarks and answers to your questions will contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address matters that are subject to risks and uncertainties that may cause actual results to differ from those discussed today. Examples of forward-looking statements include forecast of core FFO, same-store NOI, G&A, acquisition and disposition volumes, retention rates and other guidance, leasing prospects, rent collections, industry and economic trends and other matters.

We encourage all listeners to review the more detailed discussion related to these forward-looking statements contained in the company’s filings with the SEC and the definitions and reconciliations of non-GAAP measures contained in the supplemental information package available on the company’s website. As a reminder, forward-looking statements represent management’s estimates as of today. STAG Industrial assumes no obligation to update any forward-looking statements. On today’s call, you’ll hear from Bill Crooker, our Chief Executive Officer; and Matts Pinard, our Chief Financial Officer. Also here with us today is Mike Chase, our Chief Investment Officer; and Steve Kimball, EVP of Real Estate Operations, who are available to answer questions specific to the areas of focus.

I’ll now turn the call over to Bill.

William R. Crooker: Thank you, Steve. Good morning, everybody, and welcome to the second quarter earnings call for STAG Industrial. We are pleased to have you join us and look forward to sharing the second quarter 2025 results. Our year-to-date results have exceeded our initial business plan for the first half of the year. We had favorable results in our operating portfolio and meaningful progress leasing our development portfolio. I’m pleased to report that we have leased 90.8% of the operating portfolio square feet, we currently expect to lease in 2025, achieving cash leasing spreads of 24.5%. This level of leasing is at a relatively similar pace to last year and consistent over the last few years. In the first quarter, news related to the global trade war drove significant market volatility.

Broadly speaking, today, the theme has shifted to a general desensitization to tariff headlines. We are witnessing businesses continue to grow and make corporate decisions in an uncertain environment, a change to the broad pause seen in the past 12 months. While it’s certainly not business as usual, users cannot delay space decisions in perpetuity, and supply chain diversification remains a priority for many companies. On the supply side, we have seen the pipeline moderate materially. New starts are down significantly from the first half of last year. The transaction market has been slow. We are seeing positive leading indicators that the transaction market is becoming more active. We have experienced an uptick in underwritten deals within the last 3 weeks and maintain a healthy deal pipeline.

In June, stay closed on 183,000 square foot building in a submarket of Milwaukee, Wisconsin for $18.4 million. This building was acquired at a cash cap rate of 7.1%. The building was a build-to-suit for the tenant. This site serves as a national distribution facility and is located less than 10 miles away from one of the tenant’s primary manufacturing plants. This acquisition secured a newly constructed Class A asset with a strong credit profile at an accretive level. We had one disposition this quarter. We sold one noncore building in Calhoun, Georgia for gross proceeds of $9.1 million, representing a cash cap rate of 7.4% and an unlevered IRR of 14%. In terms of our development platform, we have approximately 3 million square feet of development activity across 12 buildings in the U.S. Roughly 42% of the 3 million square feet is under construction, the remaining 58% has been delivered and is currently 69% leased.

Included in these numbers is a 95-5 joint venture we entered into in May. We will construct a 500,000 square foot cross-stocked warehouse located in a submarket of Louisville, Kentucky. This is an infill site in a supply-constrained market due to topography, entitlement and zoning difficulties. The project is estimated to cost $47 million and is expected to stabilize with a cash yield of 7.1%. The building is expected to be delivered in the second quarter of 2026. I’m happy with the progress we’ve been making on development initiative. This initiative will be a key component to STAG’s future growth. With that, I will turn it over to Matts who will cover our remaining results and update the guidance.

Matts S. Pinard: Thank you, Bill, and good morning, everyone. Core FFO per share was $0.63 for the quarter, an increase of 3.3% as compared to last year. Leverage remains low, with net debt to annualized run rate adjusted EBITDA equal to 5.1x. Liquidity stood at $961 million at quarter end. During the quarter, we commenced 32 leases totaling 4.2 million square feet, which generated cash and straight-line leasing spreads of 24.6% and 41.1%, respectively. Of the 4.2 million square feet of leases commenced, 1.6 million square feet was new leasing. This compares to 280,000 square feet of new leasing in the fourth quarter of 2024 and 280,000 square feet of new leasing in the first quarter of this year. Retention for the quarter was 75.3%.

As Bill mentioned, we have accomplished 90.8% of the operating portfolio square feet we expect to lease in 2025, achieving 24.5% cash leasing spreads, demonstrating the strength of our portfolio. We expect cash leasing spreads to be between 23% and 25% for the year. We achieved same-store cash NOI growth of 3% for the quarter and 3.2% year-to-date. The primary drivers of our same-store growth in the first half of the year include the leasing spreads of 26.1% and annual escalators of 2.9%, partially offset by average occupancy loss of 90 basis points. In May, Moody’s Investor Services raised STAG’s corporate credit rating to Baa2 with a stable outlook. Achieving this upgrade despite this year’s market turmoil is a testament to the strength of the STAG platform and balance sheet.

On June 25, we funded $550 million of fixed rate senior unsecured notes from a private placement offering completed in April of this year. The notes consisted of 5-, 8- and 10-year tenors with a weighted average fixed interest rate of 5.65% and a weighted average tenors of 6.5 years. The proceeds were used to pay down the outstanding revolver balance. This quarter, we resolved two credit situations we have discussed previously. We reached an agreement with American Tire Distributors, which resulted in the assumption of all seven of our leases. As part of this resolution, STAG granted 1 month of free rent across 5 of the 7 facilities. [ Vitamin Shoppe ] assumed their leased with no adjustments and no credit loss incurred. Through June 30, we have experienced approximately 17 basis points of cash credit loss, 6 basis points of which was related to the free rent creating to American Tire Distributors.

Moving to guidance, we made the following updates. Our expected ending same-store portfolio occupancy losses has been moderated to 75 basis points as compared to our previous guidance of 100 basis points. We’ve increased our retention guidance to 75% based on leases signed to date. Credit loss guidance has been reduced from 75 basis points to 50 basis points reflecting the resolution of the American Tire Distributors and [ Vitamin Shoppe ] leases. Cash same-store guidance has been increased to a range of 3.75% to 4% for the year, an increase of 25 basis points at the low end of the range. G&A expectations for the year have been updated to a range of $52 million to $53 million, a decrease of $500,000 at the midpoint. These guidance changes result in a core FFO per share guidance revision to a range of $2.48 to $2.52 per share, an increase of $0.02 at the midpoint.

I will now turn it back over to Bill.

William R. Crooker: Thank you, Matt. I want to thank our team for their continued hard work and execution in 2025. The team has done an excellent job of executing our operating plan in the first half of the year. This strong first half sets us up well for the rest of the year. With that, I will now turn it back over to the operator for questions.

Q&A Session

Operator: [Operator Instructions]. The first question comes from the line of Craig Mailman from Citi.

Craig Allen Mailman: Bill, I just want to touch back on leasing. You noted that things are getting better, but it’s clearly not back to normal. But could you just walk through maybe what markets you’re seeing better early signs of recovery versus markets that maybe are a little bit lagging at this point?

William R. Crooker: Yes, sure, Craig. Yes, I mean, this quarter was a really strong quarter for leasing, 4 million square feet leased, 1.6 million of that new leasing. And as we look at some of the leasing that we’ve addressed in July, I mean, we’ve already — I think we’re going to sign about 500,000 square feet of — we’re going to commence about 400,000, 500,000 square feet of new leases just in July thus far. And signings executed leases in July for around 760,000 square feet, and that’s about 600,000 of renewals and about another 100,000 of signed leases for new lease in July. When you think about markets, the Midwest markets are still doing really well. Minneapolis, Milwaukee, Louisville, Detroit, Cleveland, Nashville has done really well.

Houston has done really well. And then some of the weaker markets, I would say, categorize it at more kind of bulk distribution markets, [ Indie ], Columbus, Memphis, still a little bit weaker. And then you’ve got some markets that have some short term, I think, tariff uncertainty, some of the border markets like El Paso would be one that has a little uncertainty short term, but we really like that market kind of medium term.

Craig Allen Mailman: That’s helpful. And then just a follow-up, maybe it comes at it from two parts. But you had mentioned that the transaction market is starting to get a little bit better. We’ve noticed that there are definitely some users out there, particularly ones like a Samsung that is going to be opening mega plants and they’re buying some assets down in Atlanta. Could you just talk about maybe some of the competition from well-funded users and — the impact that, that could have on some of your markets from a net absorption standpoint where it may not get picked up as a lease, but it’s essentially a lease of some bigger companies because it will be occupied by that user?

William R. Crooker: Yes. We’re seeing — that’s definitely a theme we’re seeing. I mean our Q1 sale was to a user. We see some sales in our pipeline for dispositions that are going to be some user sales. And those are pretty attractive cap rates and pricing for those transactions. And then as you noted, it’s taking some vacancy out of the market, which net-net is good for landlords in that market. And where this is happening is really, as we mentioned before, more of those onshore manufacturing markets where you got Midwest, Southeast and some Texas markets.

Operator: The next question comes from the line of Nick Thillman from Baird.

Nicholas Patrick Thillman: Maybe I wanted to touch a little bit more on just the leasing and demand and maybe talking a little bit more on like the vacancy within the portfolio and the operating portfolio less so on the development side. And just on the assets, maybe we’ll call it stubborn vacancy or areas where you’ve seen just maybe more downtime. Is there any specific markets or asset types that you’re seeing that particular? You guys have a broad breadth of markets. So I just kind of want to get some more color there.

William R. Crooker: Yes. I mean it’s a broad breadth of markets, and I would even go a step further to say it really depends on the building type in a particular market. So in some markets, if you’ve got a 200,000 square foot building, vacancy rates could be 3.5%. But if you’ve got a 500,000 square foot building or above, you could be high single-digits vacancy rate. So it really is a story of building and markets. The markets I just mentioned, I think those are pretty indicative of where you’re seeing some of the higher vacancy rates, but those are really on bigger boxes. So I would say overall, when you think about lease-up times or downtimes, when things were really going well there for a while. It was 3 to 6 to 9 months of lease-up time.

And I think we’re more in like 12 months of lease-up time for our assets. Some take a little bit longer and some are a little bit less. I mean, in the second quarter, we had a 500,000 square foot facility that we leased up with no downtime, right? So when you kind of take the mix of all that, we’re probably still looking at, on average, 9 to 12 months of lease-up for our assets. So we’re in a really good spot. I mean we’re really happy with the results we put forth to date and really happy with the guidance range we had this quarter, guidance range increase.

Nicholas Patrick Thillman: That’s helpful. And then maybe just following up a little bit, looks from your expiration schedule that you kind of started working through some of ’26, maybe like 2.7 million square feet of renewals. I guess just a little bit more color on that. Is the time line on those discussions tracking similar to what it has historically? And have you seen any sort of changes, whether it be in escalators or term when you kind of going into those renewal discussions.

William R. Crooker: Yes. I mean that’s another theme, I’m glad you brought that up is early renewals for, call it large sophisticated tenants are — they’re very active. We’re in active discussions with them. We’ve kicked off a lot of the upcoming expirations in 2026. We’re ahead of where we were last year and the year before with respect to addressing the next year’s lease expirations. And I think that speaks to the market and that these large sophisticated tenants expect that market rent growth will start increasing probably at a little faster pace as some of this supply continues to get eaten through this year. So really happy with what we’re doing with the early renewals within our portfolio.

Operator: The next question comes from the line of Eric Borden from BMO Capital Markets.

Eric Martin Borden: Bill, I just want to go back to your remarks on the acquisition market and how it’s been improving with the underwriting picking up. But you left the guidance fairly wide. So I’m just curious, what is does the pipeline currently consists of in terms of maybe singles and doubles, larger, chunkier deals and portfolios today.

William R. Crooker: Mike, do you want to talk specifically about the pipeline, the makeup or…

Michael Christopher Chase: Yes. I mean the pipeline makeup is very similar to what we’ve seen in the past. I think we’re — the majority of the pipeline, I’d say, 60% plus is kind of our one-off assets and then 20% to 30% in portfolios and then beyond that, some development deals. The market has come alive a little bit in the last couple of weeks. We’ve been seeing an underwriting and offering on more assets than we did in the second quarter. So we’re cautiously optimistic about the fact that we’ll have an active second half of the year.

William R. Crooker: Yes. When you look at the pipeline from Q1 to Q2, I think it’s down a couple of hundred million bucks. I think it’s like $3.4 billion in Q2. But what’s more important to note is the pipeline that $3.4 billion, the bid-ask spread between buyers and sellers is much narrower than it was in Q1. You’re seeing more one-off transactions get done. We’ve been very close on pricing on a number of deals, but we’re continuing to maintain our discipline, right? We’re looking at transactions that we feel like are good fits for the portfolio, those buildings fit their submarket and they’re good accretive transactions to us. So we kept the range wide, but we maintained our range because our team that we have in place, we’ve had quarters where we’ve done $700 million, $800 million of acquisitions in the quarter.

I think even last Q4, we did $300 million of acquisitions. So we’ll maintain our discipline, but it certainly feels like that market is improving and it’s improving quite rapidly.

Eric Martin Borden: That’s helpful. And then for my follow-up, just on the credit upgrade in May, does that provide you additional debt borrowing cost savings either on the line or potential future debt races?

Matts S. Pinard: Eric, this is Matt. So number one, we’re very happy and very pleased that we’re able to achieve the upgrade, particularly with the backdrop, which I mentioned in my prepared remarks. Historically, we’ve been a private placement issuer. So I think, yes, on the margin, if we were to go back to the private placement market, we expect to receive some benefit. But really what the upgrade does is it allows us to take the next step towards becoming a public bond issuer. We would like to take on an S&P investment-grade rating, so we’d have the Moody’s to fit in the S&P prior to going into that market. It’s our expectation, we’ll start working with S&P, and I can foresee in the coming 12 months that we would switch from the private to the public bond market.

But again, we maintain optionality and we’ve been incredibly successful in the private placement market. So short answer, we’re very happy. We think there’s some — maybe some modest benefit in the private placement market that absolutely sets us up for potential public bonds.

Operator: The next question comes from Steve Sakwa from Evercore ISI.

Unidentified Analyst: This is Sanket on for Steve. In case of like how are you guys thinking in terms of financing the deals that you’re trying to close in the second half of this year on the acquisition side? And then I think you guys have $300 million of debt, that’s coming due in the first quarter of next year or how are you guys thinking around the financing for this?

Matts S. Pinard: Yes. Absolutely. This is Matt again. Why don’t I take the second one first. So that’s a $300 million term loan maturing early next year. And we’re in the process of refinancing it. Typically, with bank term loans, you start that process 6 to 9 months prior to expiration. We’re in the middle of that process. We expect a successful transaction. It really is kind of down the middle rolling that term loan. So hopefully, something to announce in the next 4 to 5 weeks on that front. In terms of financing, generally, as I mentioned, when we look at our long-term debt, we look at the private placement market, we funded our $550 million private placement in June, weighted average interest expense of 5.65% 6.5-year tenor.

Those proceeds were used to retire the balances on the revolver. We have liquidity approaching $1 billion. That was the purpose. So from a financing perspective and liquidity specifically, we have roughly $1 billion in liquidity. In terms of the way that we were finding so obviously, there’d be a portion of debt. And I always like to remember people paying attention to the STAG stock, we retain north of $100 million of cash flow after dividends paid. That money can be used to finance our development platform and potential acquisitions as well. And to the extent necessary and it makes sense, incremental ATM issuance is on the table as well.

Unidentified Analyst: Makes sense. And in terms of your development pipeline, how has been the demand on the leasing side for those assets? And how are you guys thinking in terms of timing to get those assets leased?

Steve Xiarhos: Yes, it’s Steve here. Let me answer that one, and thanks for the question. I look at the development pipeline in three different buckets. We’ve got the in-service, which is 76% leased, and we really have two vacancies there. Those two vacancies are in the Greenville market, a market that we’re heavily invested in. There’s been notable improvements from prior calls in that market. Their vacancy is now sub 10% and there’s very good activity and we have prospects on both of our vacant spaces there. Second bucket I look at is the complete not in service, where we’re 47% leased. And what we have is a single building in Tampa. It’s in the Tampa East market, which is, again, a good solid market, about 5% vacancy. So the fundamentals are good there.

And we have prospects looking at that building as well. The second building in that bucket is in Nashville. We leased 200,000 of that building in the second quarter about 95,000 left. There, again, very healthy market, very strong fundamentals out that I-40 East corridor. So we feel really good about that — those portions. When we get into the under construction when we’re in Reno and Concorde, which is Charlotte and Louisville, all good markets, all good product, but we’re too early into the construction process, not a lot of leasing activity to report right now.

Operator: The next question comes from the line of Michael Carroll from RBC Capital Markets.

Michael Albert Carroll: I guess, Bill, I wanted to circle back on your comments saying that you’re starting to see an uptick in overall acquisition activity. I believe you mentioned that you’re just seeing more underwritten deals in the market the past 3 weeks. Is there any driver related to that? Is it just related to tariff concerns kind of abating and stakeholders just getting much more comfortable bringing assets to market? Is that kind of the driver of what you’re seeing the improvement over the past 3 weeks?

William R. Crooker: I mean that’s certainly a component of it. I think seller expectations is a component of it, too, understanding where the capital markets are and what buyers are willing to pay. And then I think, a little bit more conviction on the buyer side, not just us, but just other buyers of, hey, what’s happening in the market. As time passes, I think people understand that maybe the tariff threats aren’t as bad as they were initially thought to be. So I think all that helps. And then, yes, I mean, just — when we say underwritten deals, we evaluate a lot of deals. We evaluate a lot of deals in the first quarter. And then when we take them to further underwriting and presenting them to our internal investment community.

Those are deals that we think we’ve got a legitimate shot of winning. And so having that uptick in the past 3 weeks has given us that conviction to maintain our guidance range for acquisitions. I do want to note, we’ve said this before, we still anticipate much more back-end weighted acquisition cadence this year. So our initial guidance included that, so very little contribution to core FFO for this year. But we still feel comfortable with the range. And the last 3 weeks of activity has given us a little bit more conviction of that.

Michael Albert Carroll: Okay. Great. And I know activity is usually back end weighted, maybe more so this year than normal. I mean, how long does it typically take? So when do you need to have a deal locked in to close it before year-end? I mean does that happen pretty quickly? Or do you need like several months to actually close the transaction? So you need to start working on these deals now to get them done before year-end?

William R. Crooker: Yes. I’ll let Mike talk specifically, but at year-end is interesting. You’ve got sellers that really want to close quick at year-end. So the — when you get from price agreement to P&S to closing, it’s a much more compressed time frame. But Mike can walk through a little more details.

Michael Christopher Chase: Yes. I mean typically, a deal from price agreement to closing can be anywhere from 30 to 45 days. and maybe 60 depending on the seller and how quickly people are responding. But at the year-end, typically, if we’re within 30 days of the year end, 45 days of the year end, we can close on new transactions. So it goes up until the mid-November that we can put transactions under…

William R. Crooker: I mean we kind of soft circle. Thanksgiving as kind of — we can get a deal under price agreement by then or we’re looking at deals right around Thanksgiving, I think we could still close those by year-end.

Operator: The next question comes from the line of Jason Belcher from Wells Fargo.

Jason Belcher: Just following up on the development pipeline and specifically the Greenville assets. Just wondering if you could kind of remind us what your timing is, what your convention is for the timing of capitalized interest and whether you’re still capitalizing interest on those assets? And if so, when that’s expected to cease?

Matts S. Pinard: Jason, it’s Matt. So just in terms of capitalized interest, we ceased capitalizing interest once the building is complete. So these buildings are complete, we are not capitalizing.

Jason Belcher: Got it. And then if you could just give us an update on how your embedded rent bumps are trending in the current environment and any shifts you might have seen there in the last few quarters and what the average is across the portfolio.

Matts S. Pinard: Yes, absolutely. So as we sit here today, our weighted average rental escalator across the portfolio is 2.9%. That’s going to continue to tick up, just basically math. We’re not seeing leases that don’t begin with a 3% rental escalator. I would say, 12, 18 months ago, you would see the high 3s, 3.75%, maybe even 4%. We’re seeing much closer to the 3% to 3.5%. So there’s been a slight moderation, but that’s not a new trend. That’s something that we’ve been seeing over the last 6 months. But again, if we’re sitting at 2.9% today, and we’re signing leases at, call it 3.25%, that 2.9% is going to continue to edge up, just simply the weighted math.

Operator: The next question comes from the line of Mike Mueller from JPMorgan.

Michael William Mueller: I guess following up on acquisitions, a couple of things. One, did you think at all about reducing the acquisition guidance or it just wasn’t on the table because it seems like you’re feeling a little bit better. And I know you said there’s a little — just a little impact to the 25% range. But if the past 3 weeks was, say, a bit of a fall start and acquisitions don’t materialize, what’s the sensitivity to ’26. I guess, the impact to ’26, if you kind of blank the balance of the year from an acquisition standpoint?

William R. Crooker: Yes. I mean we haven’t given any ’26 guidance, Mike. So we could certainly run some back of the envelope math. I don’t have those numbers right now. If we blank the acquisition numbers for ’25, which I do not expect to happen. It’s probably $0.005 to $0.0075 for the year. And with respect to guidance, I mean, every piece of guidance that we evaluate and we go through. So we want to raise same-store guidance by 25 basis points or keep it flat or raise at 50. Do we want to keep acquisition guidance or raise it or reduce it. I mean those are all conversations we have across every piece of our guidance. So I think what’s important is we spend a lot of time on our guidance. We’re thoughtful about it, and we’re very comfortable with it.

Operator: The next question comes from the line of Jessica Zheng from Green Street.

Jessica Zheng: You have a mix of multi- and single-tenant buildings in your development pipeline today. I’m just curious, this the multi-tenant category is easier to lease in the current environment? And what are some considerations when deciding which route to take when you start a development project?

Steve Xiarhos: Jessica, it’s Steve here. I appreciate the question. I think when we set out to build these buildings, we spent a lot of time making sure that they would demise down to multi-tenant because there was greater demand in the smaller tenant space at that time, and the bulk was moving more slowly, and we want to make sure we had flexibility. What’s been interesting in the lease-up of our portfolio, if you look through it is we’ve actually done a number of single tenant deals and larger deals. So I think the answer is we’ve maintained flexibility in the design of our building in order to deal with all different tenant sizes. But so far, we’ve been fortunate to land larger tenants than maybe we had originally underwritten.

William R. Crooker: Yes. I mean two examples of that, Jessica, is our Tampa building that’s 100% leased and our Greenville building. It’s 100% leased. If you look back when those are under construction, those are both identified as multi-tenant buildings. We anticipated leasing those multi-tenant. And as Steve said, we had full building users come by to lease those buildings. So when you look at the under construction or even the not-in-service buildings that are multi, those could easily flip to single tenant if we find a full building user. Really, maintaining optionality is important for us.

Jessica Zheng: All right. That’s very helpful. And just as a follow-up, I was wondering if you can share some colors around the fundamentals in Nashville. Like in your mind, what’s been driving the outperformance in that market, recently. And I know there are several REITs, including yourself that have active developments in that market right now. What’s the supply backdrop in Nashville today?

Steve Xiarhos: I’ll go first on the supply. First of all, it is often referenced as one of the more healthy markets, the Nashville market. We do have a balance there of both manufacturing with auto, and we have the distribution market as well. And we’re finding in general that markets that have some balance of distribution and manufacturing have remained in a little bit better supply-demand condition. And then there’s been — the supply in Nashville was regulated relative to some of the other markets. It didn’t get the attention of the large bulk markets where everyone went in and created an oversupply. So it stayed in a good balance and it has a broad range of demand.

William R. Crooker: Yes. I mean the broad range of demand, as Steve said, you have manufacturing, you get distribution, but I mean you’ve had population growth in that market for the past 10 years. It’s a high consumption market and that’s also a demand driver.

Operator: Ladies and gentlemen, as there are no further questions, I would now hand the conference over to Bill Crooker for his closing comments.

William R. Crooker: Thanks, everybody, for joining the call. As always, I appreciate the thoughtful questions, and we look forward to talking to you soon. Thank you.

Operator: Thank you. The conference of STAG Industrial has now concluded. Thank you for your participation. You may now disconnect your lines.